CZ Explains Why He Recommended Pausing Withdrawals After the Bybit Hack

TLDR:

• CZ said he suggested pausing withdrawals after the Bybit hack to prevent further abnormal outflows. 
• Zhao said security risks should take priority over trading continuity, even if users face inconvenience. 
• Bybit did not pause withdrawals and saw no further issues, which Zhao says shows risk assessment is key. 
• Zhao rejected claims his 2022 FTT tweet killed FTX, saying it failed due to a lack of liquidity. 

Changpeng Zhao, the co-founder of Binance, said he urged a pause on withdrawals after the Bybit hack. He made the remarks on September 25, 2026, in an interview.

Zhao described the pause as a cautious step to stop abnormal fund outflows. He said security risks should come before trading continuity.

Bybit did not pause withdrawals, and no further problems followed. The interview also covered FTX, his pardon, and his future plans.

Why Zhao Favored a Pause After the Bybit Breach

Binance founder CZ discussed the matter on the When Shift Happens podcast hosted by KevinWSHPod. He said he publicly suggested pausing withdrawals after Bybit was hacked. In his view, the step would help prevent further abnormal outflows of funds.

Changpeng Zhao acknowledged that suspending services can disrupt trading continuity. It can also inconvenience users who need access to their funds. However, he said security risks should take priority in such cases.

Bybit ultimately did not pause withdrawals. Notably, no further issues occurred afterward. Zhao said this outcome shows that no absolute right or wrong exists in these situations.

He added that the key lies in risk assessment. He cited Binance’s response to its own 2019 hack when discussing security breaches. He also claimed that Binance’s later market share held up despite criticism after the 2025 market crash.

Zhao on FTX, Binance’s Growth, and His Pardon

Changpeng Zhao also addressed claims that his 2022 tweet about selling Binance’s FTT holdings killed FTX. Zhao responded with a pointed remark.

“If one of your competitors can make a tweet to kill your company, then you don’t have a company.” He described the post as a transparent disclosure and said he did not expect a major market reaction.

In his account, FTX failed because it lacked liquidity after misusing customer funds. He pointed to prior reporting about its finances and a response from Alameda’s CEO. Zhao argued the tweet was not the underlying cause.

Changpeng Zhao also recalled Binance’s launch in 2017. He redirected an existing exchange-software team toward building a crypto-to-crypto exchange.

He credited rapid early execution to a hardworking, humble, and closely aligned team. However, he acknowledged that strong deference to leadership can make candid feedback difficult.

He also explained the “four” meme as shorthand for focusing on education, compliance, and products while ignoring misleading negative narratives.

On his 2025 pardon, Changpeng Zhao said he applied through a lawyer and never met or spoke with President Trump. He maintained that his conviction concerned inadequate anti-money-laundering controls.

He called his punishment unusually severe, while acknowledging his view is biased. Looking ahead, he plans to advise on crypto policy, invest in Web3, and offer free education.

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